Only two days after India launched precision strikes against terror camps in Pakistan and Pakistan-occupied Kashmir as part of Operation Sindoor, the International Monetary Fund (IMF) will conduct a crucial review meeting on May 9. The executive board of the IMF will review if Pakistan has fulfilled some key benchmarks to release a tranche of $1.3 billion under its Extended Fund Facility (EFF).
India Officially Calls Upon IMF to Reconsider Support
A senior Indian government official told Reuters on Friday that India has officially requested the IMF to review its financial assistance to Pakistan. The request was made after a fatal terror attack in Kashmir and India’s retaliatory air strikes on nine terror-associated locations.
India expressed concerns that Pakistan could be diverting IMF funds to bankroll its military-intelligence complexes and terror organizations like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM), both terrorist groups as described by the United Nations.
“Funds indirectly enable support to ISI and terror groups’
India accused these loans of “indirectly facilitating the country to allocate domestic resources towards its military-intelligence complex — including the ISI — and terror organizations like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM).”
May 9 IMF Meeting: Islamabad’s High Stakes
The May 9 review is high-stakes for Pakistan’s weak economy, particularly since the country is looking to get another $1.3 billion from the global lender. The IMF will determine if Islamabad has met the reform conditions required to release the funds.
IMF Support Remains Crucial to Pakistan’s Economy
Pakistan’s reliance on the IMF has intensified over the past year. In 2023, the country received a $7 billion bailout package. In March 2024, it secured an additional $1.3 billion for climate resilience initiatives. These funds are crucial for a nation grappling with a fiscal crisis and a GDP of approximately $350 billion.
Geo-Political Backdrop Shadows IMF Decision
The IMF move coincides with increased tension on the subcontinent, following Indian military strikes in response to the terror attack on Kashmir and reported Pakistani retaliatory attacks on Indian military bases. India’s diplomatic efforts to nudge the IMF into a positive response could now complicate Pakistan’s bid for the next round of funding.
